Two lawsuits, a power struggle, and an audiotapeAssembly candidate files lawsuit accusing mayor of ‘ethnic cleansing’; secretly tapes lunch with mayor’s husband

by
Dean DeChiaroReporter staff writerHudson Reporter

Aug 18, 2013 | 11628 views | 2 | 183 | |

EMBATTLED OR AGGRESSIVE? – Carmelo Garcia, a candidate for state Assembly and executive director of the Hoboken Housing Authority, recorded a conversation between himself, former state Sen. Bernard Kenny and Stan Grossbard, the husband of Mayor Dawn Zimmer, in January, but why?

An ongoing power struggle over the future of Hoboken’s public housing between the Hoboken Housing Authority’s executive director and the allies of Mayor Dawn Zimmer has reached new levels of animosity, spilling into court in two separate legal proceedings and resulting in accusations of extortion, racial exploitation, and entrapment.

On Tuesday, Hoboken Housing Authority (HHA) Executive Director Carmelo Garcia filed a lawsuit against Mayor Zimmer and her husband, Stan Grossbard, claiming they improperly interfered with Garcia’s ability to run the HHA, just weeks after an audiotape – recorded secretly by Garcia during a lunch with Grossbard in January – surfaced during an unrelated court proceeding.

Garcia is the director of Hoboken's low-income public housing, where thousands of families live (and vote). The city’s housing projects have for years been the site of a power struggle amongst warring political factions in town. A seven-member unpaid board of commissioners oversees Garcia, and since last summer, Zimmer's allies have held a majority on the board, resulting in a tussle over Garcia’s proposal to renovate portions of the projects (involving millions of dollars in development contracts) and over which lawyers the board should employ.

In January, Garcia apparently invited Zimmer’s husband, Stan Grossbard, to lunch. During the meeting, Garcia asked Grossbard for advice on how to stop the housing board, controlled by the mayor’s allies, from opposing his decisions. What Grossbard didn’t know was that Garcia also taped the conversation. The tape came to light after it was cited in a July 18 deposition of Zimmer in an unrelated discrimination lawsuit being filed against the city by a former Hoboken public safety director. Both Garcia and the former public safety director are using the same attorney, Louis Zayas.

As rumors of the tape’s transcript began circulating in recent weeks, and questions arose over its purpose and contents, the hostility between Garcia and the Zimmer administration became more apparent.

The suit also alleges that in an attempt to sway Garcia in their favor, Zimmer and Grossbard “resorted to a pattern of harassment, threats, intimidation and extortion to coerce [Garcia] to violate his fiduciary duties in order to implement her ethnic cleansing initiative and award government contracts to Zimmer’s supporters.”

Zimmer would not comment on the suit, saying she hadn’t seen it, but she released a statement about the audiotape.

“The bottom line is that [Garcia] invited my husband to lunch,” she said. “My husband is an honest and honorable man and Mr. Garcia is not, so the only person incriminated in that transcript is Mr. Garcia.”

Garcia has been involved in Hoboken politics for over a decade, and served as Director of Health and Human Services under former Mayor David Roberts, so he is no stranger to local politics. He is also running for state Assembly this November on a ticket with State Sen. Brian Stack.

Zimmer has served as mayor since 2009 and has lived in Hoboken for approximately 10 years.

The suit alleges that throughout Zimmer’s administration, she and Grossbard “sought to promote individuals to government positions were mostly white or who, directly or indirectly, endorsed her political views and policies, including construction projects in Hoboken that would encourage the migration of white, affluent residents while replacing Hoboken’s minorities.”

The suit does not specify the specific the projects to which Garcia is referring. Zimmer has frequently taken a stance against big development.

Why tape?

Zayas, the North Bergen-based attorney with a history of working for clients opposed to Zimmer’s administration, is representing both Garcia and the former public safety director, Angel Alicea, who in an unrelated matter is suing Zimmer for discrimination leading to his resignation in April 2012.

Zayas would not say last week how Alicea became aware of an audiotape of a private lunch Garcia had with the mayor’s husband.

Grossbard and Garcia have expressed patently different opinions as to what the contents of the recorded conversation represent, with the mayor’s husband claiming that the conversation was an unsuccessful attempt by Garcia to entrap him into making an illegal agreement. Zayas said that Garcia recorded the meeting in an effort to gain proof of Grossbard’s alleged role as Zimmer’s de facto political proxy, and to provide evidence for the lawsuit against Grossbard and Zimmer, which has apparently been planned for several months.

Tape recording a conversation is legal in the state of New York, where the lunch conversation took place, as well as in New Jersey. Both states employ a “one party statute” that says taping is legal as long as one person involved in a conversation consents to it being recording (usually the person doing the recording).

Zayas refused to say whether Garcia has taped conversations with other officials.

The transcript touches on other ongoing issues in the Hoboken political scene, including the upcoming November mayoral election. In the transcript, Garcia tells Grossbard that he will support Zimmer for reelection in November if his “career is where [he] wants it to be,” which Grossbard later said he took to mean the end of the mayor’s alleged involvement with the housing board.

The apparent offer may cause friction between Garcia and state Assemblyman and mayoral candidate Ruben Ramos, who has openly supported Garcia’s Vision 20/20 plan to renovate the projects, and who has criticized the mayor for getting involved in Housing Authority affairs. In April, Ramos endorsed Garcia to take over his seat in the Assembly.

‘An unusual meeting’

The January lunch meeting took place among Grossbard, Garcia, and former state Sen. Bernard Kenny, whom Grossbard asked to bring along after Garcia invited Grossbard to lunch.

Kenny is an acquaintance of both men who acted as an intermediary third party. His law firm, Florio & Kenny, is under contract with Zimmer’s administration and he has given Zimmer political donations for the current election, but he is also a longtime acquaintance of Garcia.

The lunch took place on Jan. 16, at Jack Dempsey’s Restaurant and Bar in Manhattan, not far from Grossbard’s office. Despite nothing overtly illegal taking place, the lunch shows the interesting dynamic between Garcia, clearly desperate to improve his own working conditions, and Grossbard, who refuses to take a strong stand in replying to Garcia’s prodding about Housing Authority affairs.

Asked last week if he normally had lunch with people in the Hoboken political scene, Grossbard said that it wasn’t out of the ordinary, and that because he was married to the mayor, it was not uncommon. Still, Grossbard said, he usually makes a point to make clear that his opinions are his own, and that they’re often not shared by his wife.

But Grossbard said that he thought being asked to lunch by Garcia was unusual.

“It was extremely unusual,” he said. “Carmelo just said, ‘We’ve never had lunch before, we should have lunch and get to know each other a little bit better,’ and I said sure. He didn’t tell me what the reason for the lunch was, and I didn’t ask.’”

A transcript of Garcia’s recording, obtained by The Reporter, actually begins at the Hoboken PATH station in New Jersey and includes conversation between Kenny and Garcia until they arrive at the restaurant. It then details a discussion that quickly turns to the subject of infighting on the housing board.

‘How do you call off the dogs?’

At the time the transcript was recorded, the divided HHA board was deeply entrenched in an ongoing battle over their own legal counsel. The professional services contract for the sitting board attorney, Charles Daglian, was up for renewal, and Zimmer’s allies were staunch in their opposition. Garcia wanted Daglian to stay. The disagreement resulted in bad blood, and several housing board meetings erupted into yelling and personal attacks.

At his lunch with Grossbard, Garcia continuously laments the fighting, saying on multiple occasions that he wants it to stop.

“We have reached a point where clearly we are six months into trying to select a general counsel, five months into trying to select an auditor,” says Garcia in the transcript. “I’ve tried my best to really consult [Jake Stuiver] and those folks... enough is enough.”

Garcia adds that he has “done [his] best to make the administration look good.”

“So I am here in earnest,” the transcript of Garcia says. “Where do I fit on the team, because I want the fighting stopped. How do I get them – how do you call off the dogs?”

In the transcript, Grossbard suggests posting multiple advertisements for a new counsel on statewide municipal service websites, and counsels Garcia as to why he thinks it's important that both Garcia and the board trust a new attorney.

“I think I probably said the same thing in a million different ways,” said Grossbard in an interview last week. “I kept saying that a board needs to believe that when a lawyer gives them legal advice, that they’re not getting the board’s answer or Carmelo’s answer, but the correct answer.”

According to the transcript, Garcia then all but offers the job to one lawyer – Joe Garcia of the firm Chasan, Leyner & Lamparello – but Grossbard again advises him to advertise more widely. It is unclear why Garcia named that particular lawyer, though his firm signed contracts with City Hall in 2010 and 2011 worth upwards of $200,000.

Grossbard said last week, “I kept telling him that if [he] had a disagreement with the board because they don’t trust the professionals, the best way to not fight and to gain credibility with them is to hire professionals that everybody trusted.”

“At the time I didn’t feel he was trying to entrap me, but now that I know I was being taped, I think he was essentially trying to get me, on Dawn’s behalf, to steer the contract to Joe Garcia, something that nobody was trying to do,” he said.

Grossbard says that he thinks Carmelo Garcia invited him to lunch because he is close to Stuiver and board member/Councilman David Mello.

‘I would be with the mayor’

Later in the conversation, Kenny, who remains relatively silent throughout the conversation, asks Garcia to recall what he told him on the PATH train earlier in the day, when the two were discussing Ramos, the state assemblyman who at the time was still weighing a run for mayor. Garcia says that if his “career is where [he] wants it to be” he will support Zimmer over Ramos, his longtime ally.

“I said emphatically, definitely, that I would be with the mayor, Dawn Zimmer,” says Garcia during the lunch, according to the transcript.

Following the statement, he launches into a long speech about his family, his morals, and his willingness to do all the right things, before asking Grossbard for direction.

“What do you want to do? If this is where you want me to take you, I will get you there,” Garcia says in the transcript. “But give me the direction, because I can’t possibly, with these other folks, it is a riddle, it's a guessing game, and I can’t, it drives me insane.”

Grossbard again responds by telling Garcia that he must work with the board. The meeting concludes, and the transcript ends, again, with Kenny and Garcia on the PATH train.

Grossbard said last week that he felt uncomfortable after leaving the meeting, and wondered whether he ought to report Garcia’s overtures to the county prosecutor. In the end, he didn’t, deciding that without evidence, he wasn’t sure his claims would stand, nor was he positive Garcia had done anything illegal.

Garcia’s lawsuit

Garcia’s lawsuit repeatedly refers to Grossbard as Zimmer’s “de facto chief of staff” and portrays him as her main political advisor. Zimmer’s opponents have, for years, said Grossbard was heavily involved in the administration. Grossbard has said these claims are just thinly veiled sexism against his wife, but he acknowledged that years ago, residents tried to convince him to run for office before Zimmer volunteered herself as a candidate.

The lawsuit discusses instances at Housing Authority meetings late last year and earlier this year when Stuiver, allegedly at the behest of Zimmer and Grossbard, attempted to terminate Garcia’s employment contract with the HHA. This, the suit alleges, is extortion.

Pressed to explain the claim and why it was not filed as a criminal complaint, but only a civil one, Zayas said it was “not a classic case of extortion.”

“It’s not your classic extortion where someone’s saying ‘Do what we want or we’re going to come back and burn your house,’” he said. “They’re threatening him with something very special to him, and that’s his employment contract.”

There are other accusations in the lawsuit as well, including specific instances when Garcia alleges Zimmer directed her allies on the board to direct their votes one way or the other, on professional contracts and board appointments.

There is no allegation that the group was trying to do so for personal financial gain, only political gain.

Zimmer, in response, said that Garcia’s race-related arguments have no place in Hoboken politics.

“I think it’s clear from his statement that he’s playing the race card,” she said.

Was the transcript edited?

Grossbard said last week that he’s concerned about the transcript’s accuracy. The gist of it is correct, he says, but he described the transcription as rough and full of small mistakes.

Grossbard said he thought the transcript’s errors could have something to do with his positioning during the lunch. Jack Dempsey’s was noisy and crowded that day.

Zayas, who said that the transcript will play a major role in Garcia’s lawsuit against Zimmer, Grossbard, and Stuiver, denied that any purposeful edits were made to the transcript.

“There’s no editing. Carmelo tape recorded it because he wanted to forward it to law enforcement,” said Zayas in an interview on Thursday. “He felt that he needed evidence to support what he’s alleging. This is Grossbard’s attempt to deflect the issue in order to create doubt.”

Zayas admitted that he had not heard the entire recording on which the transcript is based. He did say that “in the right opportunity, we will present the tapes.”

Revealed as part of Alicea case

Until late July, Grossbard and Kenny were unaware that the lunch meeting had been recorded. They learned of the transcript’s existence when Zayas, representing the former city official Alicea, deposed Zimmer in Alicea’s litigation and began to ask questions about Grossbard’s involvement with the administration.

A transcript of Zimmer’s July deposition in relation to the Alicea matter shows a line of questioning by Zayas that becomes increasingly specific about the January conversation, which Zimmer says in the deposition she vaguely recalls, though she did not remember details.

Zayas portrayed the meeting as an attempt by Grossbard to coerce a deal out of Garcia. Arnold Gerst, Zimmer’s attorney in the case, objected to Zayas’ line of questioning on multiple occasions, according to the deposition. But in an interview, Zayas said his questions were perfectly reasonable.

“The mayor was not being forthcoming in describing her husband’s role in her administration,” he said. “Our position is that he is the de facto chief of staff and that he advises her politically and legally. We used the transcript to demonstrate that, not to introduce it into evidence.”

During Zimmer’s deposition in the Alicea matter, Zayas finally began to quote the transcript of the lunch meeting directly, at which point Gerst demanded a copy.

Zayas would not say if Garcia had given him the transcript to use in other cases.

“I’m not going to discuss what Carmelo did or did not do,” he said. “I used the transcript in a deposition to refresh the mayor’s memory.”

Accusations ‘sexist’

Much of Garcia’s lawsuit hinges on the belief that Grossbard is really the power in City Hall. But Grossbard, who runs his family’s diamond business in midtown Manhattan, called the accusations despicable.

“To the comments about whether or not my wife is running the city, I think they’re incredibly offensive, I think they’re sexist, and I think the people who spread those kinds of insulting sexist lies should be ashamed of themselves,” he said.

He also expressed his view that Zimmer’s gender often opens her to baseless criticism.

“My wife is the mayor of Hoboken and she’s been a fantastic mayor of Hoboken, and I don’t think that this type of silliness would even be on the table if she were a man,” he said.

He noted that he did not initate the lunch, nor was he the one that recorded it. He said he often rubs elbows with Hoboken politicos, if for no other reason than that sometimes they want to gauge his opinion on his wife’s views.

“This was not my lunch. The agenda was his; not mine,” he said. “Being in politics, you understand it's a family affair. Dawn’s political career is something that is up to our entire family to make work. It’s a very big part of my life and it’s a very big part of my children’s lives. It’s pretty overwhelming.”

Was the recording ethical?

Despite directing most questions to Zayas, Garcia issued a statement on Thursday night defending his recording the conversation, and his decision to file suit.

“The egregious actions by [Zimmer], her husband/de facto chief of staff [Grossbard], and [Stuiver] left no other option except for legal recourse to remedy the hostile environment that they have created through coercion, intimidation, harassment, and political corruption,” said the statement.

“I refuse to allow Mayor Zimmer to continue with her racially biased social agenda that has affected numerous Hoboken residents to this date,” the statement continues. “It's time to expose their hypocrisy and tell my story, so look forward to my day in court to expose these horrific wrongdoings and have justice prevail not only for myself, but for all the residents of Hoboken.”

Zayas responded to a question about whether voters in the 33rd legislative district should care about Garcia taping the conversation, saying, “The fact that he had to record people means that the problem was pervasive.”

The upshot

Asked if he thought the matter would come to litigation, Zayas said that he thought the suit itself might be enough to cease Zimmer’s alleged harassment.

“My experience in this case is that when a lawsuit like this is filed, the harassment stops,” he said. “My opinion is that he’s a whistleblower. I admire Mr. Garcia for doing what he did. I think it took courage.”

What’s next?

Both the transcript and the lawsuit pose interesting questions about the state of Hoboken politics: Is there any wrongdoing on either side that rises to the level of criminality, or is it just typical dirty Hoboken politics that is slowing down an agency meant to preserve the quality of life for the city’s poorest residents? Is the Zimmer administration, which touts itself as being anti-corruption, getting too involved in an agency that is by law supposed to be autonomous, or is it simply trying to change yesteryear politics and meeting staunch resistance? Is Garcia being persecuted by City Hall, or is he having trouble adjusting to his new role as the odd man out in a political milieu that he once controlled?

The answers seem to depend on which political side a person is on.

Kenny had planned to speak on the record regarding his involvement in the lunch, but was forced into emergency surgery on Thursday morning to correct a detached retina. Reached by phone on Wednesday night, the former state senator offered just one thought.